Oil prices experienced an uptick on Thursday following the United States’ initiation of new strikes against Iran. This development has diminished expectations for a resolution to the Iran conflict and for the complete reopening of the Strait of Hormuz, a critical passageway that accounts for one-fifth of global oil supplies prior to the war. Brent crude futures increased by 78 cents, or 1%, reaching $78.8 a barrel as of 0054. U.S. West Texas Intermediate crude futures increased by 74 cents, representing a rise of 1.01%, reaching a price of $74.26 per barrel.
Both crude benchmarks experienced an increase of over a dollar in post-settlement trade on Wednesday following the initiation of new military strikes by the U.S. on Iran. Prior to that, the benchmarks had reached their peak in more than two weeks following U.S. President Donald Trump’s warning of potential new strikes against Iran as early as Wednesday night. The U.S. military announced the initiation of new strikes on Iran, with the objective of ensuring the vital Strait of Hormuz remains accessible for maritime traffic. This development follows President Donald Trump’s assertion that an interim agreement to conclude the conflict has been deemed “over.”
The recent surge of oil traffic through the strait has subsided, as shipowners are anticipated to adopt a more prudent approach, according to analyst Tony Sycamore in a note. The U.S. stated that its most recent series of attacks was a reaction to the assault on three tankers that occurred on Tuesday while transiting the strait. The U.S. attacks have caused significant disruption in several cities along Iran’s southern coast, resulting in power outages in certain areas.
Iran announced on Wednesday that it conducted attacks on U.S. military installations in Bahrain and Kuwait as a retaliatory measure following previous U.S. strikes on its infrastructure. Some war underwriters have recommended that shipping companies suspend voyages through the Strait of Hormuz, while others are reassessing their policy terms following Iran’s recent vessel attacks, according to sources within the insurance industry on Wednesday.